Medicaid costs are putting a financial burden on Indiana hospitals.
The Indiana Hospital Association, along with hospital CEOs across central Indiana, stress the importance of increasing Medicaid reimbursement rates.
"2023 has been a rough year financially. We have great culture, great employees, but it's been a struggle financially," Johnson Memorial Health CEO, Dr. David Dunkle, said.
It's a struggle that's forced Johnson Memorial Health to dip into its savings, according to Dr. Dunkle.
"It's disheartening when every month, we're losing money. What I'm telling my staff is you need to contact your state representatives and let them know how much hospitals are struggling," Dr. Dunkle said.
The reason for the financial strain is Medicaid and Medicare reimbursement.
"Indiana, when it comes to inpatient reimbursements, is the eighth lowest in the country. We haven't had an increase in our Medicaid base rate in 30 years,” Dr. Dunkle said. “Imagine that, 30 years and no increase. It’s amazing we’ve allowed this to occur.”
Medicare covers patients 65 and older.
Medicaid patients can include people of any age, with a disability, or those considered low income.
However, the Indiana Hospital Association said only 57 cents of a dollar is paid back from Medicaid. That's a nearly 50% loss.
IHA says Medicare pays back more than 80 cents of a dollar.
“It affects everybody, so the costs that need to be made up get shifted. It’s unfortunate but that’s the way our healthcare system works. Those costs get shifted to those of us with private insurance,” Brian Tabor, President of the IHA, said.
Tabor says more than 2 million Hoosiers rely on Medicaid and Medicare.
He also says those with other insurance plans will continue to pick up the financial slack until lawmakers increase Medicaid reimbursement rates.
“We don’t want costs to be shifted over to the private sector. Medicare is unlikely to change much in the short term, but we have a great opportunity to do what all of our surrounding states have done, which is to boost their rates by taking advantage of federal programs,” Tabor said.
Hancock Health treats patients on the far east side of Indianapolis. The organization’s CEO, Steve Long, says most people don’t know Indiana partially funds Medicaid.
“Medicaid is a state federal partnership and the way it works is the state puts in, say $1, and the federal government matches it in the state of Indiana with $2,” Long said. “So, the majority of the money that actually funds the state, part of the match comes from hospitals.”
Hospitals across Indiana say that loss plus rising costs for supplies and salaries are threatening medical services mostly in rural communities.
"It could be the closure of an Obstetric unit, maybe a cancer service. It could be other programs. We are seeing those difficult decisions being made. We've even seen a couple of hospitals close here in Indiana," Tabor said.
"Not everyone can travel 30 miles to deliver baby or 30 miles, emergency departments, what happens, people don't get the care that they need. And, as we saw during the pandemic, when people were afraid to go to hospitals, where you don't seek out medical care, bad things happen," Dr. Dunkle said. "People need to know we cannot sustain this model with the current reimbursement levels."
